10 Questions to Ask Before Joining a Network Marketing Company
Network marketing, also known as multi-level marketing (MLM), can be an exciting business opportunity for those looking to earn extra income or build a full-time career. However, not all network marketing companies are created equal. Some offer real opportunities, while others can be scams or unsustainable pyramid schemes.
Before you invest your time and money, it's essential to do thorough research. Here are 10 crucial questions to ask before joining a network marketing company to ensure you’re making a wise decision.
1. What is the Company’s Reputation?
Before joining, research the company’s background.
Questions to Consider:
How long has the company been in business?
What are current and former distributors saying about it?
Are there any lawsuits or complaints against the company?
Tip: Check reviews, Better Business Bureau (BBB) ratings, and regulatory bodies like the Federal Trade Commission (FTC) for any red flags.
2. Is the Business Model Legal and Ethical?
Some MLM companies operate like pyramid schemes, which are illegal. A legitimate MLM focuses on selling real products to real customers, not just recruiting people.
Questions to Consider:
Is the company’s main focus on selling products, or is recruitment the primary way to earn?
Does it comply with MLM regulations set by the FTC?
Tip: If most of the company’s revenue comes from recruitment fees instead of product sales, it’s a red flag .
3. What Products or Services Are Being Sold?
The success of a network marketing business depends on the value and demand for the product.
Questions to Consider:
Is the product unique, high-quality, and in demand?
Would you buy and use the product even if you weren’t part of the company?
How does it compare to similar products on the market?
Tip: Avoid companies selling overpriced, low-quality, or unnecessary products.
4. How Much is the Initial Investment?
Most network marketing companies require an initial investment. Make sure you understand all costs upfront.
Questions to Consider:
What is the startup cost?
Are there any hidden fees, such as training, renewal, or website fees?
Do you have to purchase large amounts of inventory?
Tip: If the investment is high and there’s pressure to buy a lot of stock, it could be a red flag .
5. How Do You Make Money?
Understanding the compensation plan is key to knowing if the opportunity is worth it.
Questions to Consider:
Do you earn primarily from product sales or recruiting others?
What percentage of sales do you keep as commission?
How do bonuses, residual income, and rank advancements work?
Tip: If making money mainly depends on recruitment, it might not be a sustainable business.
6. Are There Monthly Sales Quotas?
Some MLMs require members to sell a minimum amount of products every month to stay active or qualify for commissions.
Questions to Consider:
Are you required to buy or sell a certain amount each month?
What happens if you don’t meet the sales quota?
Will you be forced to buy products to maintain your status?
Tip: Avoid companies that require constant purchases to remain active. You could end up spending more than you earn.
7. What Kind of Training and Support is Provided?
A good network marketing company provides strong training and mentorship to help you succeed.
Questions to Consider:
Is there structured training available (e.g., webinars, mentorship, marketing materials)?
Will you get personal coaching from experienced leaders?
Does the company offer online tools and resources?
Tip: Success in network marketing depends on skills. If training is weak, you might struggle to grow your business.
8. How Saturated is the Market?
If the market is already oversaturated with distributors selling the same product, you may have trouble finding new customers.
Questions to Consider:
How many distributors are already selling in your area?
Is there room for growth, or is the market too crowded?
What makes you stand out from competitors?
Tip: A company with too many distributors in one area might not offer great earning potential.
9. What is the Company’s Return Policy?
A reputable company should have a fair return policy in case products don’t sell or you decide to leave.
Questions to Consider:
Can you return unsold inventory?
Are refunds provided, or will you lose your money?
Is there a buy-back policy if you decide to quit?
Tip: Legitimate MLMs allow distributors to return unsold products with reasonable terms.
10. What is the Realistic Income Potential?
Most people in MLMs earn little to no money. Some even lose money due to ongoing expenses.
Questions to Consider:
What is the average income of distributors at different levels?
What percentage of members make a full-time income?
Are income claims backed by real financial disclosures?
Tip: If the company promises “get rich quick” results, be skeptical. Network marketing requires hard work and persistence to be successful.
Final Thoughts: Is Network Marketing Right for You?
Network marketing can be a rewarding opportunity, but it’s not for everyone. Before joining, take the time to research, ask these key questions, and analyze if it’s a legitimate, ethical, and profitable business.
Red Flags to Watch For:
Heavy focus on recruitment over product sales
High upfront investment with no real return policy
Unrealistic income claims (“Earn $10K/month with no effort!”)
No real customer demand for the product
Good Signs of a Legit MLM:
Strong product demand and customer base
Fair compensation with earnings from product sales (not just recruitment)
Reasonable investment with refund options
Transparent leadership and solid training
Before You Join – Ask Yourself:
Do I believe in the product?
Can I realistically make money without recruiting others?
Is the company ethical and legal?
If you answer YES to these questions, the opportunity might be worth considering. If not, keep looking for better business options!
